Driving the Transition: Accelerating Low-Emissions Hydrogen Adoption Through Strategic Government Actions
Key Ideas
  • Governments are urged to stimulate demand for low-emissions hydrogen by implementing policies like quotas and carbon contracts, focusing on industrial hubs and high-value sectors.
  • To bridge the cost gap and drive scale-up, targeted support for project developers is essential, alongside ensuring long-term visibility over support levels and exploring various policy options.
  • Regulations setting acceptable emissions levels and ensuring transparency in fossil fuel supply emissions are crucial for the certification of low-emissions hydrogen.
  • Efforts to accelerate hydrogen infrastructure development, particularly in emerging markets, are vital to establish the link between supply and demand and support global growth.
The article emphasizes the need for governments to play a proactive role in accelerating the adoption of low-emissions hydrogen. It suggests that policies like quotas, mandates, and carbon contracts need to be expanded to drive demand, especially in industrial hubs and high-value sectors like steel, shipping, and aviation. By pooling demand in these areas, the article argues that scale can be achieved while reducing risks for producers. Leveraging public procurement for products consuming low-emissions hydrogen and encouraging consumer markets willing to pay premiums for such products can boost early adoption. Furthermore, support for project developers is highlighted as crucial in bridging the cost gap between low-emissions and fossil-based hydrogen. Governments are advised to provide clarity and long-term support to attract investors and facilitate the scaling up of the sector. It suggests exploring various support mechanisms beyond grants and subsidies, such as loan guarantees and public equity investments. The article also stresses the importance of strong regulations and certification processes for low-emissions hydrogen, advocating for setting emission thresholds and ensuring transparency in fossil fuel supply emissions. Governments are encouraged to align regulations with standardized methodologies like the ISO approach to enhance global interoperability. In terms of infrastructure, the article calls for swift action to develop hydrogen infrastructure to support the growing demand. It suggests repurposing existing natural gas pipelines, streamlining regulatory frameworks, and fostering public-private partnerships to de-risk investments. Lastly, the article highlights the potential in emerging markets and developing economies for low-emissions hydrogen production, emphasizing the need for targeted support to address financing challenges. By tapping into this potential, countries can reduce import dependencies, cater to domestic needs, and even explore exporting hydrogen-based products like fertilizers. Overall, the article advocates for strategic government actions to drive the transition towards low-emissions hydrogen globally.
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